The financial markets reacted positively to a euro zone deal on massive standby rescue package for cash strapped Greece, cutting the county’s borrowing costs and buying up its stocks and bonds.

Euro zone finance ministers agreed a 30 billion euro package of three-year loans at an interest rate of around 5 per cent.

Vassilis Vlastarakis, is an analyst for Beta Securities

“Nobody expected such a big amount to be put on the table. We congratulate this, we didn’t expect it either. We have to expect the reaction of the markets especially the bond markets – we are anticipating a shrinkage of the spreads today, a substantial one.”

The IMF has stepped in with an additional 15 billion euro loan in the first year if the country needs help.

“Short term Greece needs lower interest rates. If the rates do not go down they will make use of the mechanism. I think it’s been a case of a domino. Greece promised, now Europe has promised. Now Greece has to take the gun and use it if the spreads do not go down.”